Initial conditions as predictors of new venture performance: A replication and extension of the Cooper et al. study

In the words of Hubbard, Vetter and Little (1998, p. 252), 'systematic replication replaces piecemeal, untested results with useful findings that address practical problems.' We agree with this. We further hold that for empirical relationships to be really interesting and meaningful one should be able to make a strong case that they represent causal and generalizable relationships. In addition, they should allow a meaningful theoretical interpretation. In this study we try to adhere to such ideals by replicating and extending a theory-driven study of the effects of initial conditions on new venture performance (Cooper, Gimeno-Gascon & Woo, 1994) using a very large (7000+ cases) and high quality, longitudinal data set. Data on initial conditions were collected in 1995 (within a year after first registration) and outcomes were assessed in 1998. On a conceptual level, our results confirm those obtained by Cooper et al. (1994) regarding how general human capital, management know-how and industry affect marginal survival probability, as well as concerning the effects of financial and general human capability on the likelihood of becoming a high performance venture. The results sometimes coincide also on a very detailed level, such as the differential effect of gender on marginal survival vs. its effect on high performance. Other parts of Cooper et al's (1994) result could not be replicated. To some extent this may be due to weak operationalizations of certain constructs, but real sample and/or country differences may also play a role.